All Forum Posts by: Axel Meierhoefer

@Jeff Love Hi Jeff

I am retired Air Foce (22 years, last assignment Holloman AFB). I have developed a small tribe of people who are investing with me and use my mentoring for support.

I hope you have a bunch of years left and would love to encourage you to use your VA loan eligibility to get properties while in service. In addition, funds allowing, I can help you with turnkey properties in a clustering approach so you have a great portfolio to reach the goals you described. If you re close to PCS, please act with urgency as you want to use your advantages as much as possible.

If you like my help, please DM me and we can arrange for a conversation.

Be well

Axel

@Sateesh Kumar I have worked for clients in Oakland and Berkeley and lived near by for three years. I always avoided Oakland and a 12 plex for 2.2 mil is probably a really scary area.

It all depends on what your goals are but if I were I your shows I would buy probably 6+ SFR properties for cash right now, get about $8K in income/month, and when reates come down, I would put nonrecourse loans on them, use the remaining $400K and get another 3 SFR units. With 9 properties, 4 paid and 5 financed, you could clear a bunch of cash flow, pay for rent in SFo area or almost and if you buy something in SFO, you could do the home buyer jumbo loan thing and pay the mortgage with the passive income your tenants give you each month.

Keep in mind that a 12plex is a commercial real estate property that does not apply for traditional residential financing and the only way to increase value is by improving the rent roll. I would be very careful about that in Oakland.

One indication, just to give you something to ponder:

When I worked in Oakland in 202 they had the Warriors (basketball), A's (baseball), and Raiders (NFL football). For 20 years the teams tried to get new stadiums but the city refused.

The Raiders are in Vegas, The Warriors are in SFO, and the A's will be in Vegas soon as well. THat's not a place I suspect will appreciate much. The Bay area has also been the one area where property values are declining the last few years and work from home has driven a lot of people out of the overpriced Bay area markets.

I would work there, rent, and invest in much better-paying locations.

Happy to help you if you are interested. 

 ok, sounds good

 That made me laugh. True, there are many many folks suggesting that city. While it would be silly, there are good locations in Ohio and some other states.

@Argel Algura congratulations on joining Bigger Pockets and being open about your situation.

Success in investing in real estate starts with the framework, or call it "vision" you create for your future. You just joined and the year just started, so perfect timing for that.

When I started I decided that I want to develop a portfolio of residential real estate investment that generate cash flow for me, my family but also the next generation, i.e. my daughter.

If I were in your situation right now, especially because you said that "Skills like raising capital, sourcing/closing deals and underwriting/analysis are no stranger to me", I would probably focus on being the bank for people who want to own their own house/residence in markets that have a good ratio of price and rent level. The idea is to help people who currently pay a good amount of their income as rent and want to be homeowners but, similar to you have either a low credit score or other things in they past that make it hard to get financing from traditional lenders.

It's not the only but one of the few approaches that allow you to start without having to invest much. As you said, a few thousand Dollars can get you started.

I agree with all the folks who said not to start in San Diego or any location where the ratio of purchase price and income level (i.e. rent) is below 0.9%.

@Caroline Gerardo Thanks for sharing. This si really helpful for investors who were or are looking for appreciation as their main goal.

I am investing for cash flow. Obviously I love the appreciation that might occur but the only use will be to get HELOC against the equity so I can add more properties to my portfolio.

For anybody who is considering that approach on properties in these locations should probably keep a bigger buffer in their HEKOC use than the 20%-25% the banks/lenders require anyway.

@Julio Medina 

Hi Julio

Welcome to the BP community. I started the same way. I was an executive at a software company in Santa Barbara and the area was way too expensive to get any performance out of investments.

I did study a lot of different options and realized (for me and my family) that the government is actually supporting investing in residential real estate with a lot of benefits.

I first determined what I believe performance really means and concluded that for me, it means I should have some positive cash flow from day 1 after closing (or Day 1 when a tenant moves into the property).

It also meant that a good tool to even see if any available deal could work was applying the 1%-rule. If I got an offer for, let’s say $150K and the rent was not somewhere close to $1500/month, I would not even twitch. That has proven to be a god-sent now that interest rates are so high. In the past, it ensured good cash flow.

Ultimately, I learned (expensive lesson) that having a provider of a property (even if it meets the 1% rule), and separate property management creates an issue each time something needs to be tended to in the property.

So, to start I looked at locations where I can find properties that perform to the rules above. That resulted in investing in places like Idaho, Ohio, Tennessee, etc. Pretty soon after my first investment I began developing relationships with lenders, insurance providers, and my preferred providers, the great turnkey providers. They find the ugly duckling in a good neighborhood, renovate it, sell it to me for a price that appraises so the lender is happy to finance it, and then also manage it for me – all in one hand. Some are now so confident in the quality of their renovations that they cover repairs and management fees for the first year and put tenants in before closing.

Just like I am writing here for you, I told my friends when they wanted to know “What are you up to these days?”. I am now offering a mentoring program for anybody who likes to not just invest but really build a legacy and a complete portfolio. The “Time Freedom Point” is that major milestone we are all working towards, so we gain financial independence and keep growing our assets in a safe, multi-generational way. In some cases, people just like to get access to my network, and I am happy to share. If that sounds like something you would consider, let me know and I would be happy to help you. Bigger Pockets helped me when I started, and I am happy to pay it forward.

If you like help with suitable SFR and 1031, DM me and we can collaborate. I have the providers if you like to use them

@Jerryian Francois

When that comparison is done, don't forget that the hard money lender wants interest in most cases from the start on the full amount while a HELOC only requires payments on what you're actually using, so your project plan and timeline is very important.